It is still extremely difficult to make predictions. Technically the S&P is still in a bear market rally (as long as the upper white resistance line is not broken) but I still think that the conditions are not as bad as the market expects them to be. Both my trading systems are bullish. However Iran or Europe are always good to change this again.
As expected the last two trading days showed a sideway to downside trading pattern. The S&P made it to the first resistance line and bounced back down again.
After last week's rally the markets are still far away from being overbought. The S&P is still sitting on the 61.8 retracement and is facing major resistance levels on the upside. However, December is usually one of the strongest months. If the technical side doesn't provide reliable signs it might make sense to have a look at other markets.
In my opinion the bond market has found resistance and is about to form a double top (which is equal to a support for TBT, double bottom) and should be able to provide the necessary cash for the stock markets. It just retested its broken short term resistance and will hopefully break its 50d MA soon.
Additionally as long as the USD index doesn't confirm its recent short term up trend by a new high the long term downward trend will be dominating sending the index down and the stock markets up.
As expected the last two trading days showed a sideway to downside trading pattern. The S&P made it to the first resistance line and bounced back down again.
In my opinion the bond market has found resistance and is about to form a double top (which is equal to a support for TBT, double bottom) and should be able to provide the necessary cash for the stock markets. It just retested its broken short term resistance and will hopefully break its 50d MA soon.
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